“We’re grateful to the commission, and grateful to all the people that came forward and supported us,” including the Merchants of Upper Market & Castro and others who wrote letters supporting the project, said Boneberg.

In return for the city’s sign off on the partial expansion, the plan is for Walgreens to lease the remainder of the space to the historical society for five years. The LGBT nonprofit plans to relocate its exhibitions and programs to the Castro space as early as this fall.

But planners had wanted to see Walgreens relocate its build out of patient consultation rooms from the middle to the back of the empty former Laundromat. They were concerned that allowing the national chain to move forward with its plan could leave an oddly shaped store for rent in the future.

“We learned early this week that is not acceptable to Walgreens, meaning if that condition is applied they will not proceed,” Boneberg said before the commission’s vote, adding that he’d only learned of the planner’s request late last week. “It is also counteproductive to what the historical society wants.

“We are flabbergasted,” Boneberg had added. “We think it is an error by planning department staff.”

Boneberg said that the historical society expects to open their silver anniversary exhibit in early September.

All exhibits and public programming, such as speakers, will occur at the 18th Street location.

For now, the group’s archives and offices will stay at 657 Mission Street, but Boneberg said they hope to move someplace larger and less expensive by early next year.